Government is expediting the domestication of raw materials in the value chains to increase local goods’ competitiveness, Finance and Economic Development minister Mthuli Ncube said Friday, a move which reduces Zimbabwe’s reliance on imports for the needs of industry.
The development comes at a time when local goods are uncompetitive due to the cost of raw materials imports.
Speaking at the 2022 annual congress, Ncube said the localisation of raw materials would help to reduce high cost of doing business.
“Government is committed to the process of domesticating all major value chains and improving the diversity and complexity of Zimbabwe’s manufacturing,” Ncube said.
Zimbabwe’s cost of production and cost of doing business is very high compared to other nations, thereby making the country’s goods and services costly.
Experts suggested that the local goods are pricey as compared to other goods on the continent hence this makes a country’s exports uncompetitive when one compares with the amount used to produce those goods.
The high cost production has seen locals preferring imported products which are cheaper to locally manufactured goods.
“Having realised that our goods remain uncompetitive, we are now considering the localisation of the raw materials to ensure raw materials are produced at relatively prices. This will be the first step towards removing high costs,” Ncube said.
“Government will also avail more tax rebates and Value Added Tax deferment to manufacturing, mining, tourism, agriculture, transport, energy and health sectors to lower production costs.”
The manufacturing industry recorded gains in capacity utilisation which dashed to 56.25% in 2021 from 47% in 2020.
He said the growth in capacity utilisation is evidenced by marked increases in availability of domestically-produced goods in supermarkets.